Insights

AMZ H1 Update: Kitchen

By August 21, 2018 No Comments

by Ojastro Todd, One Click Retail

We may still be a long way from Alexa cooking meals for you, but Amazon has already secured a place in the American kitchen. In recent years, when consumers in the US need new kitchenware and appliances, they’re turning to Amazon in numbers that continue to grow at a massive rate.

In the first half of this year (H1 2018), American consumers spent a record-setting $2.3 billion on Kitchen appliances. Over the same period in 2017, that figure was only $1.7B, meaning total sales grew by a whopping 36%. This is even more impressive when you consider that the first half of the year doesn’t include Prime Day, Black Friday or the holiday season, the three biggest sales periods annually.

In our last H1 update, we discussed the performance of the Home category. Many industry analysts (ourselves includes) have often discussed Home and Kitchen as one product group, but in the past Home has always been the bigger of the pair. This year, the growth in Kitchen category (36% YoY) dwarfs that of Home (16%), and the two categories are nearly the same size. Now that Kitchen has broken the $1 billion per quarter threshold, we’ve decided that it’s time to look at it as its own distinct category, easily ranking as one of Amazon’s largest.

AMZ H1 Update: Kitchen

 

Cooking Appliances

While Amazon is extremely popular across demographics, its most active users tend to skew toward young professionals. These consumers are highly driven by convenience. Today’s busy lifestyles drive a huge demand for products and appliances that make food and beverage prep simpler and faster, and many innovative brands are having success by meeting this demand.

At the same time, they don’t want to sacrifice healthy, homemade meals. This makes the Instant Pot a perfect fit for today’s consumer. The Instant Pot, the user friendly, multi-functional slow cooker / pressure cooker (and everything in between), enables consumers to prep meals and then let the appliance do the rest while they go about their day.

The Instant Pot not only dominates the Pressure Cooker category, it also dominates the list of bestselling Kitchen items in H1 2018, with five different models of the hit product ranking among the top 10 items overall. The Instant Pot is available in a variety of sizes and models, but 6-quarts seems to be the winning size, with 4 of the top 5 being that size. However, consumers overwhelmingly want the best and are willing to spend more for it. The most advanced model, the 10-in-1 is the biggest seller, with models decreasing in sales rank based on their total number of features.

This hit product has helped to make Cooking Appliances the fastest-growing Kitchen category (55% YoY). Pressure Cookers alone doubled their sales in H1 2018, for which Instant Pot can take virtually all of the credit. The increase in demand for easy and convenient home cooking appliances is going to be a major driver of sales of Kitchen products for the foreseeable future.

AMZ H1 Update: Kitchen

 

 

Hot Beverages

Hot Beverages is a distant second to Cooking Appliance in terms of total sales, but is also growing rapidly (40% YoY). During the first half of 2018, Americans drank more coffee than they have since 2012, with growth happening in both home-brewed coffee and in gourmet hot drinks. This thirst for coffee, even as soda and juice consumption continues a years-long decline, is fueling home appliance sales, and it’s no surprise that Amazon’s sales in this category are following suit.

The reigning champion subcategory is Single Serve Brewers, still riding on the success of Keurig (Nespresso is a distant second). These pod-based coffee makers, pioneered by Keurig, have vastly increased the ease of access for fresh-brewed coffee in US households and workplaces. Essentially replacing instant coffee, coffee pods are a single cup, single use disposable product which consumers are increasing purchasing in bulk (many are among the bestselling Grocery items on Amazon).

In contrast to the Instant Pot, where the most advanced version is the bestseller, consumers still prefer the classic Keurig machine over more premium, feature-heavy options: in the first half of this year, the K-Classic pulled in almost double the sales of the next most popular machine, the K575. Capitalizing on the ongoing popularity of these products, Amazon introduced their own line of Solimo-brand coffee pods, which were an almost-overnight success.

However, the K-Cup fad may not be infinite. The increased consumption of coffee in the US is also being driven by gourmet espresso-based drinks, and consumers are going to want to bring that into their homes as well. Breville’s flagship Barista Express Espresso Machine has been growing in popularity on Amazon.com, ranking as the #7 bestselling Kitchen product on during H1 2018 despite being 6 times the price of the K-Classic.

This reveals that, despite broader trends, a growing subset of Amazon shoppers are prioritizing quality over both cost and convenience. Identifying these niche audiences will be a critical element of brand success in the coming years.

AMZ H1 Update: Kitchen

 

 

Conclusion

The on-the-go lifestyle is a major force throughout the Kitchen group. Bar, Beverage & Storage, the #3 category by size, was boosted by growth of insulated beverage containers, with Thermos and HydroFlask ranking as some of strongest Kitchen brands on Amazon. Similarly, Blenders from NutriBullet and Ninja also rank among the top 10 items during H1 2018, driving a 20% growth in their category.

It’s clear that the Kitchen space has been shaped by the busy lifestyles of Amazon shoppers. Consumers are buying thermoses to fill them with K-Cup coffee or meal-replacement smoothies in order to have their breakfasts during their commutes, and they’re turning on their slow cookers before they leave the house so that their dinners will be ready when they get home from work.

Product success on Amazon – and throughout the Kitchen industry – involves understanding how consumers go about their day. Brands that discover new ways to make someone’s daily routine a little more efficient will be rewarded for it. At the same time, consumers are also placing more and more value on their leisure time, and want to use that time to make gourmet coffee drinks and decadent home-cooked meals or to fill their HydroFlask with water and go for a long day’s hike in the woods.

In the coming months and years, growth in the Kitchen group is going to be fueled from both extremes: convenience and leisure activities. Knowing what part of your customer’s life you want to improve is the key to success on Amazon.

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